Question

The tax penalty imposed on appraisers:

a. Can be as much as 125% of the appraisal fee that was charged.

b. Is waived if the taxpayer also was charged with his/her own valuation penalty.

c. Equals 25% of the appraised value of the property, with a $10,000 minimum penalty.

d. Applies only if the appraiser knew that the appraisal would be used in preparing a Federal income tax return.

e. Is imposed only with respect to gift and estate tax returns.

Answer 1

Option A is correct.

under new section 6695A.

The penalty is equal
to the greater of $1,000 or 10% of the amount of tax attributable to a substantial or gross
valuation misstatement, up to a maximum of 125% of the gross income received by the
appraiser.

Option a is correct. And all other options are incorrect.

i.e. Tax penalties imposed on appraisers can be as much as 125% of the appraisal fee that charged.

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